Page 59 - Yucaipa Valley Water District

Director Memorandum No. 19-003 Page 7 of 9

the District by book entry, physical delivery or by third-party custodial
agreement. At the time a repurchase agreement is made, the underlying
securities shall be valued at one hundred and two percent (102%) or
greater of the repurchase price. If an agreement is in effect for more than
one day, and, in the event their value drops below one hundred and two
percent (102%) of the repurchase price, the seller to the repurchase
agreement shall provide additional securities or money within one business
day so that the value of the collateral is not less than one hundred and two
percent (102%) of the repurchase price. At the expiration of each
agreement, the District receives payment of the repurchase price as a
condition for the transfer of the underlying securities back to the Seller;

8. Negotiable certificates of deposit issued by a nationally or state-chartered
bank or a state or federal savings association (as defined in Section 5102
of the California Financial Code) a state or federal credit union, or by a
state-licensed branch of a foreign bank. Purchases of negotiable
certificates of deposit may not exceed thirty percent (30%) of the District’s
money which may be invested pursuant to this section. The District is
prohibited from investing the District’s funds, or funds in the custody of the
District, in negotiable certificates of deposit issued by a state or federal
credit union if a member of the District’s Board of Directors, or any person
with investment decision making authority with the District, also serves on
the Board of Directors, or any committee appointed by the Board of
Directors, or the credit committee or the supervisory committee of the state
or federal credit union issuing the negotiable certificates of deposit.

9. Shares of beneficial interest issued by diversified management companies
(also known as mutual fund companies) that invest in the securities and
obligations as authorized by Government Code, Section 53601(a) to (j), (m)
and (n) and that comply with investment restrictions contained in
Government Code, Section 53630, et. seq. However, a county or party to
a reverse repurchase agreement or securities lending agreement is not
required to be a primary dealer of the Federal Reserve Bank of New York
if the diversified management company’s board of directors finds that the
counterparty presents a minimal risk of default, and the value of the
securities underlying a repurchase agreement or securities lending
agreement may be 100% of the sales price of the securities are marked to
market daily. The diversified management company in this section shall
have attained the highest ranking or the highest letter and numerical
ranking provided by not less than 2 NRSROs. The purchase price of
shares of beneficial interest shall not include any commission or load that
the company may charge and shall not exceed twenty percent (20%) of the
District’s money that may be invested pursuant to this Statement of
Investment Policy. No more than ten percent (10%) of the District’s money
may be invested in shares of any one mutual fund referenced in this
paragraph (ix);

10. Shares of beneficial interest issued by diversified management companies
that are money market funds registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 (15 U.S.C. Sec.
80(a-l et seq.). The diversified management company shall have attained

Yucaipa Valley Water District - January 15, 2019 - Page 57 of 184